Excuses don’t justify gas prices

You probably have noticed that gasoline prices are moving slowly downward. Very slowly — but right on schedule.

After rising sharply starting in mid-July, with the average cost for regular gas climbing from around $2.60 to $2.80, the typical price at the pump peaked around Aug. 20. From there, it decreased at the rate of about a penny a day through the end of August, when it was $2.69 a gallon, according to a national site with the local presence of coloradospringsgasprices.com.

For some folks, it’s simply not a big deal. They look at gasoline as a necessity, the same as buying food and paying rent. Whatever the price is, they pay it and go on with their lives.

But for many, the price of gas matters and it’s a very real part of the business or household budget. When the charge for a tank of gas rises noticeably at each fill-up, that quickly adds up from a few dollars at first to much more when the weeks turn into months of seemingly inflated prices.

We pay attention because gasoline is a constant expense — for businesses as well as families. And what we’ve seen in recent months has risen far above the level of just being a nuisance. It feels wrong, with our gas more than 20 cents above the national average (we’re usually well below that average).

Normally, we watch fluctuations in the market for crude oil and expect the pump prices to behave accordingly. But that hasn’t been the case lately.

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Consider this: Back in mid-January, regular gas in Colorado Springs was down around $1.71 a gallon, with crude oil between $45 and $50 a barrel. Between November 2014 and the end of February 2015, crude oil had shot down from $73 a barrel to the $50 range, and our pump prices fell by 70 to 80 cents a gallon.

What we’ve seen in recent months has risen far above the level of just being a nuisance.

But from March into July, as crude oil inched upward to the $60 vicinity, gasoline leaped upward to $2.60. And then, when the global glut of crude oil sent that market plummeting to $40 and even lower — nothing changed at the pump.

Oh, we heard excuses. It’s the summer tourism season, you know, which means higher demand. And a refinery in Indiana — that’s right, Indiana — was having production issues, and that supposedly was causing our continued pain. Really.

One didn’t have to dig far to find problems with those excuses.

For starters, as many in the industry will tell you, summer tourism for much of America begins seriously winding down in early August as public schools begin their new academic year. And other states with far more summer visitors than Colorado have had much cheaper gas this past month — Florida being just one example. All the late-season beachcombers down there have been paying in the $2.20s or less.

As for Indiana, drivers in, yes, Indianapolis were paying 30 to 40 cents less a gallon than here until a brief mid-August spike, then Indy’s prices finished August back down again, 25 to 30 cents below that of Colorado Springs.

It just doesn’t add up, and Denver has shared the same plight. Especially when other cities have had far cheaper gas — Birmingham, Ala., for example, went from about $2.15 down to $2 average in August.

Our guess is, gas prices here will tumble more in the next week, toward $2 a gallon. But you’d think major media, with far more resources to put into an investigation, might want to look for better answers than we’ve heard lately.

1 COMMENT

Did CSBJ really entertain to publishing a gas price editorial complaining about gas price differentials in different regions?….

Oil prices vs. Gas prices are not 1-to-1, differences in demand and supply, being downstream lag from refineries (hint, they’re mostly in the gulf-coast), differences in taxes. The list goes on, and the complaint is about small margin discrepancies?

Take the same graphs they’re using from the same website and extend the time scale out to the max (11yr), and tell me there’s some discrepancy in prices. What about the times we lagged in prices coming down, and we lagged in prices going up?